My slides on the FTT versus the FAT, to be presented this Friday at the Amsterdam Centre for Tax Law's conference on taxing the financial sector, are available here.
One topic I don't address in the slides, because I didn't think it was within my topic assignment, concerns the question of FTT feasibility. An FAT is pretty much feasible. The only really troubling question (and I admit it's a significant problem) is defining the set of financial sector firms to which it would apply. In particular, what does one do about the issue of financial firms that are in effect embedded in non-financial firms?
With respect to the FTT, one problem is international considerations, which are likely to be a lot more troubling than those presented by the FAT. Domestic banking activity, which the latter tries to reach, is a more stable and less elusive category than the former's reach of domestic financial transactions (or even those conducted by domestic taxpayers).
But in addition, the wonderful world of derivatives presents a huge challenge for the FTT. I know people are aware of this, and contemplate taxing derivative transactions under the FTT equivalently to the "primary" (or whatever one calls it) transactions that they replicate. But it may often be impossible to determine this equivalence, since there may be multiple renderings of what is equivalent to a given derivative transaction. This is likely to be a big problem even if regulators are able to observe everything that is happening, which is a big question in itself. I believe that other panels at the Amsterdam conference may be directly addressing this issue, but it did not appear to be the focus of the more bigthink-oriented panel on which I was asked to participate. It is certainly important, however.
Part of my responsibility in connection with the proceedings is to write (by the middle of January) a short article that will be published in a conference volume that the Amsterdam Centre for Tax Law is planning. I will of course post it on SSRN, and I also have permission to do something with it in the U.S., such as submitting it to Tax Notes. But I don't know yet if I will consider this suitable. (I'd have to see what I write in order to evaluate this - the issues being both how happy I am with it and whether it seems sufficiently in-context for U.S. publication.)